
Ill 




HB 172 
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Copy 1 



A CORRESPONDENCE 



BETWEEN 



AN AMATEUR AND A PROFESSOR 



OF 



POLITICAL ECONOMY 



TWO LETTERS FROM THE AMATEUR URGING A PROFESSOR IN 
THE UNIVERSITY OF CALIFORNIA TO STUDY "PROGRESS 
AND POVERTY." THE PROFESSORS REPLY; AND 
/ A FINAL EFFORT BY THE AMATEUR 

NOTES AND APPENDIX 

BY 

T. H. BENTON De WITT, Ph.D. 



These letters having come into my possession from the amateur him- 
self, who playfully defies me to print them, I accept his challenge. Here 
they are : 

On the part of single-tax zealots (most of whom have not the faintest 
conception of economic science) there has been so much letter-writing to 
those whom they choose to call " Orthodox Economists," that the " Ortho- 
dox," weary of the platitudes, usually disdain to reply. This correspond- 
ence, consisting of three letters (by one who has read only to confuse 
himself), addressed to Professor Plehn, of the University of California, 
and his one, convincing, dignified reply is printed in the belief that it can 
be widely used to silence men who know not of what they speak. Yet 
it is printed, less in the spirit of exultance than of sadness, and, if possi- 
ble, to arouse thought on a most serious subject. To excite the reasoning 
powers to action. To develop real students in a sphere where real study 
is needed. 

T. H. Benton De Witt, Ph.D. 
San Jose, California 

December i8, 1897 



PHILADELPHIA 
1898 




■0 '. a^ 



1786 



"The domain of law is not confined to physical nature. It just as 
certainly embraces the mental and moral universe ; and social growth and 
social life have their laws as fixed as those of matter and motion. Would 
we make social life healthy and happy we must discover those laws, and 
seek our ends in accordance with them." 



Printed by J. B. Lippincott Company. 



A CORRESPONDENCE 

BETWEEN 

AN AMATEUR AND A PROFESSOR OF 
POLITICAL ECONOMY. 



Camden, New Jersey, November 4, 1897. 
To Carl C. Plehn, 

Professor of Political Economy, 

University of California, Berkeley. 

Dear Sir, — Two or three years ago, when Louis F. Post, at 
the University, addressed the classes of Political Economy upon 
the Single Tax, I remember you said that the subject was one to 
which you had given little attention, and upon which you would 
express no opinion. For this reason I take the liberty of sending 
you a New York Journal containing some remarks upon the 
Single Tax in connection with the death of Henry George. 

A much older man than you, making Political Economy my 
hobby, I had read a great deal upon the subject and given it, as 
I supposed, deep thought ; when, therefore, some fifteen years 
ago, "Progress and Poverty" was urged upon my attention, I 
laughed at both the book and its supporters. Finally, a gentle- 
man, who because of his vigorous mental grasp, and possibly also 
because he was rich and influential, I held in much esteem, spoke 
so highly of the work, that I determined to read it, note its 
inaccuracies and fallacies, and prepare a paper pointing them out. 

In order to do this successfully I read very slowly, annotating 
page by page, with references to Smith and Ricardo, Malthus and 
Mill. But — the result ! When half through the book, I, a gray- 
haired man, deeming myself an authority, sat spellbound at the 
feet of the greatest of masters. 

I recognized that, as currently taught, political economy is 
truly a dismal science, hopeless and despairing ; but that freed as 
George frees it, "Political Economy is radiant with hope." 

I had found work to do in the world. I had found something 
to live for. 

From your remarks to the class I am led to hope that this great 
comfort may also come to you. 

"Progress and Poverty," opposing, as it does, principles that we 
have deemed altogether axiomatic, is usually repelled, often with 



4 A Correspondence be hue en an A mate 21 r 

indignation. " The truth that I have tried to make clear will not 
find easy acceptance ; if that could be it would have been ac- 
cepted long ago. If that could be, it would never have been 
obscured." 

Then to call Professor Plehn's attention to the terrible power 
of custom to deaden thought, Amateur cited part of Chapter VII. 
of "The Land Question," in which George imagines that a large 
and prosperous piratical business, established by Kidd, to have been 
handed down to his great-great-grandsons, and to Smith, Jones, and 
Robinson, who have purchased interests therein. Piracy by that time 
being looked upon as the most natural thing in the world, and pirates 
treating with contempt people who had to work. 

"But at last" he supposes "that merchants get tired of losing 
their ships, and sailors get tired of trembling for their lives, and 
demand of society that piracy be stopped." Society could not 
for a long time be roused to listen. "Not only would all the 
Kidds loudly claim that to make them give up their business 
without full recompense would be a wicked interference with 
vested rights, but the justice of this claim would at first be 
assumed as a matter of course by all or nearly all of the influen- 
tial classes, — the great lawyers, the able journalists, the writers 
for the magazines, the eloquent clergymen, and the principal 
professors in the principal universities. Nay, even the merchants 
and sailors, when they first began to complain, would be so 
tyrannized and browbeaten by this public opinion that they 
would hardly think of more than of buying out the Kidds, and, 
wherever, here and there, any one dared to raise his voice in 
favor of stopping piracy and at once and without compensation, 
he would only do so under penalty of being stigmatized as a 
reckless disturber and wicked foe of social order. 

" If any one denies this, if any one says that mankind are not 
such fools, then I appeal to universal history to bear me out. I 
appeal to the facts of to-day. 

"Show me a wrong, no matter how monstrous, that ever yet 
among any people became engrafted in the social system, and I 
will prove to you the truth of what I say. 

"The majority of men do not think; the majority of men 
have to expend so much energy in the struggle to make a living 
that they do not have time to think. The majority of men 
accept, as a matter of course, whatever is. This is what makes 
the task of the social reformer so difficult, his path so hard. This 
is what brings upon those who first raise their voices in behalf of 
a great truth * the sneers of the powerful and the curses of the 
rabble, ostracism and martyrdom, the robe of derision and the 
crown of thorns." 

The truth arrived at in "Progress and Poverty" is, to most 
men, obscured by its very simplicity. " But so simple and clear 

* If some good men advocating truth have been stoned, a great many more 
bad men disseminating evil have met with that fate. — T. H. B. De W. 



mid a Professor of Political Economy. 5 

is it * that to fully see it once is always to recognize it. There 
are pictures which, though looked at again and again, present 
only a confused labyrinth of lines or scroll work, — a landscape, 
trees, or something of the kind, — until once the attention is 
called to the fact that these things make up a face or a figure. 
This relation once recognized, is always afterwards clear. It is 
so in this case. In the light of this truth all social facts group 
themselves in an orderly relation, and the most diverse phenomena 
are seen to spring from one great principle." 

So unfailingly accurate, it seems to me, is the logic of Henry 
George, and so precise is his language, that I should recommend 
the study of his writings, rather than of the text books, in order 
to become skilled in reasoning. 

I sincerely hope that you may be induced to give the matter 
thought. Remembering that "Progress and Poverty" is not a 
diffuse, but a condensed book ; requiring closest attention. That 
it cannot be grasped by reading reviews of it ; nor by breaking 
in here and there to get at the gist of the matter ; nor by skim- 
ming through, as one does a novel. " Pour arriver a la conception 
d'une theorie quelconque, il faut passer par les intermediaires qui 
ont conduit I'auteur lui-meme aux resultats qu'il presente," says 
Madame De Stael,t and the remark applies with special force to 
"Progress and Poverty. " 

With respect, 

James Love. 

Some days after writing the above, Amateur, discovering that 
Professor Plehn had, in a book pubHshed in 1896, expressed decided 
views upon " Progress and Poverty," deemed it proper to write to 
him again, as below : 

Camden, New Jersey, November 18, 1897. 
Professor Carl C. Plehn, 

University of California, Berkeley. 

Dear Sir, — Although I knew that you had published a work 
upon " Public Finance," I had never seen it, and for some reason 
had assumed that it was a school text-book and not controversial. 
But yesterday, having an opportunity to examine a copy, I dis- 
covered that I was, at least partly, in error. Had I known of this 
expression of decided opinion I should not have written. But 
inasmuch as I have, and notwithstanding that it is an ungracious 
task, I now feel constrained to point out what I believe to be 
misconceptions. 

For instance, on page 109, I read, "Every kind of economic 
wealth may, and often does under certain circumstances, yield its 

* Strange that trained economists can't see it. — T. H. B. Dk W. 

f Amateur evidently wished to impress Professor Plehn by quoting the 
original instead of a translation, — " To attain a conception of any theory 
whatever, we must pass through the intermediate ways which have conducted 
the author himself to the results he exhibits." — T. H. B. De W. 



6 A Corrcspotidence between an Amateur 

owner an unearned increment;" and also, '' The abolition of all 
other taxes on different forms of property would also be unjust. 
Every kind of economic wealth may under certain circumstances 
. . . yield its owner an unearned increment. Why should this 
escape and the unearned increment of land alone be taxed?" 

This "unearned increment" argument is not Henry George's. 
It occurs in the writings of John Stuart Mill ('' Political Econ- 
omy," Book v., Chapter ii.), and with you I hold it to be unten- 
able. George argues that land values ("rent") should be taken 
by the community for the use of the community, not because they 
are unearned by the individual holders, but because they belong 
to the community, being by it earned or produced. 

"Why should this value alone be taxed?" The reply to this 
composes the whole ten books of "Progress and Poverty." It 
is in answer to this question, it might be said, that the work was 
written. 

On page 107 I read, "It is unjust because the fundamental 
concept that land values are solely due (italics Amateur's) to the 
presence of a large number of inhabitants is untrue." 

This is not George's "fundamental concept," although it 
might have been Ricardo's. George differs from Ricardo, not 
only in asserting that increase of population operates in two ways 
instead of one, but also in arguing that causes other than this 
increase tend to increase rent. I quote from "Progress and 
Poverty": "What is the force or necessity that, as productive 
power increases, distributes a greater and greater proportion of 
the produce as rent ? The only cause pointed out by Ricardo as 
advancing rent is the increase of population." . . . "The effect 
of increasing population upon the distribution of wealth is to 
increase rent (and consequently to diminish the proportion which 
goes to capital and labor) in two ways: First, By lowering the 
margin of cultivation. Secondly, By bringing out in land special 
capabilities otherwise latent, and by attaching special capabilities 
to particular lands. I am disposed to think that the latter mode, 
to which little attention has been given by political economists, 
is really the more important." " Without any increase in popu- 
lation, the progress of invention constantly tends to give a larger 
and larger proportion of the produce to the owners of land." 
The whole of Chapter iii.. Book iv., is an argument to show that, 
irrespective of the increase of population, the tendency of improve- 
ments in methods of production and exchange is to increase rent. 

You write, page 107, " It demands a perfection in the technique 
of administration as yet absolutely unattainable." 

The present method of excises, licenses, complex system of 
customs, taxes upon goods, machinery, buildings, inheritances, 
incomes, promissory notes, stocks, bonds, with the necessary 
attendants of a fleet of revenue cutters, and an army of custom- 
house officials, coast guards, deputy marshals, deputy assessors, 
spies, and informers, — a method that offers reward for its viola- 
tion, and that induces lying and perjury, — would be replaced by 



and a Professor of Political Economy. J 

one single, easily assessed, easily collected, and unavoidable tax 
upon the value of land, and, it seems to me, would go far to 
bring about that "perfection in the technique of administration 
as yet absolutely unattainable." Chapter iii.. Book viii., of 
Progress and Poverty. "The Proposition tried by the Canons 
of Taxation," it seems to me, makes this more than plausible. 

You write, "It is not feasible, since it would not yield the 
necessary revenue. It is estimated that the entire rental value of 
the land in England falls two hundred millions short of present 
revenues," and in the United States you seem to accept an esti- 
mate placing "rent" at ;$7i4,224,i82. 

Do you mean two hundred million pounds or dollars ? Do you 
mean England alone? The Exchequer is Great Britain's. If 
"rent" justly belongs to the public, then the public should col- 
lect it, no matter how small. Your figures being true, expenses 
might be cut to fit the revenue, or the deficit made up by con- 
tribution. But we deny the truth of the figures. Economists 
and statisticians overlook or minimize all except agricultural 
"rent." Even Ricardo, in his famous law, seems to have in 
mind nothing more than farms. But considering the great extent 
and value of British mining lands, the great value of the railway 
lands, and especially the enormous value of the lands of the many 
towns and cities, in addition to the agricultural rents, it is hard 
to believe that the aggregate is not greatly in excess of that now 
raised by the motley tax. As for the United States, Thomas 
G. Shearman, in his "Natural Taxation" (New York, 1895), 
makes it clear, I think, that "rent" largely exceeds our present 
revenues. 

You write, "That excluding from tax the man whose property 
(italics Amateur's) is improved by grading and metalling a 
street," etc., seems to be unjust. 

What property is increased in value by such improvements? 
Only the land. This is more clearly seen where one man owns 
the house and another the land, a system prevailing in all English 
cities and not uncommon in our own. 

You write, " Moreover, as improvements are not to be taxed, 
it would mean a heavier burden on farming lands than on city 
property. " 

Here you give the same value to two terms of different values, 
— "lands" and "property;" farming lands and city property. 
That the Single Tax would mean a lighter burden on farming 
lands than on city lands, and remove great burdens from working 
farmers, is made especially clear in Chapter xx. of Social Prob- 
lems, headed ' ' The American Farmer. ' ' 

I do not think you always avoid a common fallacy, that of 
using the same term in different senses. "Nothing," says 
George, " can add to the force of what has been said by so many 
eminent authors as to the importance of clear and precise defini- 
tions, save the example (not an infrequent one) of the same 
authors falling into grave errors from the very cause they warned 



8 A Correspondence between aii Amateur 

against. And nothing so shows the importance of language in 
thought as the spectacle of even acute thinkers basing important 
conclusions upon the use of the same word in varying senses." 

You say in a passage I have quoted, " Every kind of economic 
wealth may under certain circumstances , . . yield its owner an 
unearned increment. Why should this escape and the unearned 
increment of land alone be taxed?" Here the plain inference is 
that you include "land" in the term "wealth." Now, as you 
teach that land and labor (or, perhaps, land, labor, and capital) 
are factors essential to the production of wealth, by including land 
in Avealth, there results, — that land is a factor essential to the pro- 
duction of land. 

Upon this subject George writes, "The errors . . . which 
consist in confounding with wealth and capital things essentially 
distinct . . . are now merely vulgar errors. They are wide- 
spread, it is true, and have a deep root, being held, not merely 
by the less educated classes, but, seemingly, by a large majority 
of those who in such advanced countries as England and the 
United States mould and guide public opinion, make laws and 
administer them in the courts.* They crop out, moreover, in 
the disquisitions of many of those flabby writers who have bur- 
dened the press and darkened counsel by numerous volumes 
which are dubbed political economy, and which pass as text- 
books with the ignorant, and as authority with those who do not 
think for themselves. Nevertheless, they are only vulgar errors, 
inasmuch as they receive no countenance from the best writers 
on political economy." 

Had I first examined your work, as I have said, you would 
have been spared these letters. 

With respect, 

James Love. 

P.S. — "Progress and Poverty" is written in the true spirit of 
philosophy, — the inquiring spirit. Assuming, at the very begin- 
ning to possess the principle which it should have been the aim 
of his many volumes to discover, Herbert Spencer becomes a 
special pleader, as one might say, a paid advocate for the defence. 
George, on the contrary, in Progress and Poverty, first presenting 
a problem to be solved, proceeds carefully and logically to its 
solution. "I have in this inquiry," he writes, "followed the 
course of my own thought. When, in mind, I set out on it I 
had no theory to support, no conclusions to prove. Only, when 
I first realized the squalid misery of a great city, it appalled and 
tormented me, and would not let me rest, for thinking of what 
caused it and how it could be cured." 

* Amateur having omitted it, I add the closing part of this quotation as an 
example of George's general feeling that he is the one open-minded juror 
opposed to a stubborn eleven. — T. H. B. De W. 



and a Professor of Political Economy. 



PROFESSOR PLEHN'S REPLY. 

University of California, 
Berkley, California, November 24, 1897. 
To Mr. James Love, 

Camden, New Jersey. 

Dear Sir, — Your two letters have been received. On account 
of press of college work I was obliged to delay answering the first 
at the time of its receipt, and will now attempt to reply to both. 

Briefly, my general position is that taxation should be equal. 
A tax is equal when it leaves the tax-payer in the saitie position 
relative to his fello7us as it found him. This the " Single Tax" 
does not pretend to do. The intention of this tax is to destroy, 
to a certain extent at least, the receipts of the land-owner. 

Private property in land is not a natural right, no more is 
private property in anything else. Society — or the community — 
is essential to all earnings. Land values are earned by the com- 
munity — so are all other values — the value of the workingman's 
product, the value of capital — of all forms of wealth. The 
individual has a right to one kind of property no more than to 
any other. But we allow private property as a privilege because 
it works well. Private property in land, as in any other form of 
wealth, rests on the same basis of expediency. In the Middle 
Ages, when Henry George's plan was universal and the entire 
rental of all land went directly to the public officials, the feudal 
lords, we had little progress. From the settlement of America, 
and with the origin of private property in land among the Eng- 
lish colonists, dates the greatest advance the world has ever made. 

The most potent cause in the advance of civilization in this 
country has been the privilege of owning land. Settlers will not 
take the trouble to improve land without the stimulus of owner- 
ship. I cannot see that it would be expedient to lessen the privi- 
lege of private property in land. 

In detail as to your criticism of my statement in " Introduction 
to Public Finance," if land values are earned by the community, 
they may be said to be unearned by the individual, I cannot see 
the point of your exception to my form of stating George's 
doctrine. 

Again, you take exception to my statement, the fundamental 
concept of George is that land values are due to advancing popu- 
lation. But your own quotation sustains my statement, "The 
effect of increasing population upon the distribution of wealth is 
to increase rent ... in two ways, etc."* In Book iv., Chapter 

* Francis A. Walker, in the North American Review and other places, 
has attacked with bitterness this notion of George, that " rent" tends to rise 
while wages and interest tend to fall amid a stationary population, provided 
its productive powers are increasing. His last assault is printed posthumously 
in the Century Magazine for November, 1897, " The Causes of Poverty." It 
would be well to read not only Chapter iii. of Book iv., but the entire book, 
" Effects of Material Progress upon the Distribution of Wealth," to compare 
with Plehn and Walker.— T. H. B. De W. 



lo A Correspondence between an Amateur 

iii., the argument is that land values rise with the increase in 
population on account of the increase in demand, and that im- 
provements in production are of the same character, — i.e., cause 
an increase in demand. This is very different from saying, as I 
do, page 107, "Introduction to Public Finance," "The value of 
land, like that of other wealth, depends upon the use to which it 
is put." 

The figures I used were the best attainable. They bear simply on 
the proposition that " single tax" means " sole tax." If " single 
tax' ' means two or three or four or more taxes, my argument is 
not pertinent. My figures included city rents, mining royalties, 
etc., but not railroad franchises, which I do not understand that 
George includes. 

Now, as to the poor farmer. I have recently studied the oper- 
ation of the general property tax in California. (See "Studies 
American Economic Association," ii. 3.) I find that, accord- 
ing to the theory of the general property tax, the farmer pays 
about twenty-three per cent, more than his share. According to 
my preferred test — ability — the farmer pays over twice as much 
as he should. This injustice, or, better, inexpedient method of 
taxation, is already causing a depopulation of rural districts in 
the United States. Now, at present, part of the burden is borne 
by city improvements, which are larger relative to the land than 
the farmer's improvements relative to his. Exempt improve- 
ments and the share of the burden which must fall on farm lands 
would necessarily increase. 

The change in terms which you criticise in the statement, 
" Moreover, as improvements are not to be taxed, it would mean 
a heavier burden on farming land than on cW-j property,'' is not 
essential to the thought. The same truth might be stated by 
using the term city land for city property. 

Finally, "land" is wealth, land is capital. The original and 
indestructible qualities are only the material out of which land 
capital is made. So is iron the material out of which machinery 
is made. I am at present at work on a theory of distribution, 
which does not leave room for the senseless and unbusiness-like 
distribution between land and capital. An elaboration and sim- 
plification both of Senior's "Analysis," which is hinted at once 
or twice in my " Public Finance." 

What do you say, with the light of your theory, to the remark- 
able decline of poverty, in spite of the increase in general wealth 
during the last thirty years ? Is the decline of poverty a proof of 
a retrograde in prosperity? According to George's theory, pov- 
erty should have increased with the continuance of progress. But 
the reverse has been the case, and poverty has decreased fifty-five 
per cent, since i860. 

Yours, very truly, 

Carl C. Plehn. 



mid a Professor of Political Economy. 1 1 

CLOSING LETTER. 

Camden, New Jersey, December 2, 1897. 
To Professor Carl C. Plehn, 

University of California, Berkeley, California. 

Dear Sir, — My first letter was written in the hope that views, 
which I had once held and abandoned, might in your case be 
provisory ; that, upon certain positions at least, you might be 
open to conviction, and that you might be induced to study a 
work now become famous. 

The subject is so vast. The land question is so related to 
every condition of modern society, affecting, as I think it does, 
even religion and morals and philosophy, that a correspondence 
can result only in tiring and irritating the correspondents. Yet, 
in closing, permit me to make one more effort to excite your 
interest. 

Denying natural rights, although using the words "just" and 
"unjust," you would rest your arguments on expediency. But 
we single taxers hold that expediency and justice always corre- 
spond, — " That alone is wise which is just ; that alone is enduring 
which is right;" and in denying Mill's argument for the public 
appropriation of rent, you feel that you are also denying George's. 

r In Re 

Excogitative Court. J John Doe, Plaintiff, 
Perpetual Term. | vs. 

y Richard Roe, Defendant. 

Now Cometh the plaintiff, John Doe, demanding of the de- 
fendant, Richard Roe, the sum of one dollar, which said plaintiff 
alleges was stolen by said defendant from him the said plaintiff, 
who had earned it and to whom it belonged.* 

Whereupon, in answer, appeareth said defendant Roe, admit- 
ting that the dollar in question is, no doubt, an unearned incre- 
ment to his, the said defendant's, wealth. But alleging that, in- 
asmuch as there are other forms of unearned increment, it would 
be unjust to seize his alone. For why should they escape while 
his is taken ? 

To which answer plaintiff Doe takes exception, alleging, with 
emphasis, that he demands the dollar, not because it is an un- 
earned increment to defendant's wealth, but solely because, having 
been earned by, it justly belongs to him, the plaintiff, from whom 
it was stolen by defendant. 

To which exception defendant now rejoins. If the dollar has 
been earned by the plaintiff, it may be said to be unearned by de- 
fendant, and defendant cannot see the point of plaintiffs excep- 
tion to defendant's form of stating his case. 

* Amateur's idea of legal form seems to be a document well peppered 
with "saids." In mercy I have stricken out eight. — T. H. B. De W. 



12 A Correspondence between an Amateur 

You aver that "settlers will not take the trouble to improve 
land without the stimulus of ownership." 

Speculators will not take the trouble to hold land for a rise 
without that stimulus. Settlers are merely the first improvers. 
What is needed to induce improvement is not ownership of the 
land, but security for the improvements. Almost all the build- 
ings of London stand upon leased land. In New York City 
are, among others, the Sailor's Snug Harbor estate, and the Col- 
legiate Church estate, the first of twenty-one acres and the latter, 
I think, of four or five, that have always been leased in building 
lots, and are now closely built upon, being occupied by ware- 
houses, hotels, and so on, among the best. 

You write, " What do you say with the light of your theory to 
the remarkable decline in poverty, in spite of the increase of gen- 
eral wealth, during the last thirty years? Is the decline of pov- 
erty the proof of a retrograde in prosperity? According to 
George's theory, poverty should have increased with the contin- 
uance of progress. But the contrary has been the case, and 
poverty has declined fifty-five per cent, since i860." 

I can't think that you include California in that percentage of 
decline. Besides, can we be certain of such statistics ? Do we 
read them aright ? I might ask you, what about Russia two years 
ago ? and India this year ? poverty famines. Do you forget the 
South of Ireland? or in contemplating London's wealth forget its 
want ? Poverty ! The forty-five per cent, left even in New York, 
or Philadelphia, or San Francisco should make our hearts sick. 
The complete answers, of course, are in " Progress and Poverty," 
from which I quote merely a few lines from the introductory 
chapter. "It is true that wealth has been greatly increased, and 
that the average of comfort, leisure, and refinement has been 
raised; but these gains have not been general. In them the 
lowest class do not share.* I do not mean that the condition of 
the lowest class has nowhere nor in anything been improved ; 
but that there is nowhere any improvement that can be credited to 
increased productive power. ' ' (Italics Amateur' s. ) 

* " It is true that the poorest may now, in certain ways, enjoy 
what the richest a century ago could not have commanded, but 
this does not show improvement of condition so long as the ability 
to obtain the necessaries of life is not increased. The beggar in a 
great city may enjoy many things from which the backwoods farmer 
is debarred, but that does not prove the condition of the city beggar 
better than that of the independent farmer." 

Commencing in the latter half of last century, there has been 
an era of invention such as the world had never dreamed of. 
Labor has been endowed with a flood of wealth-producing tools, 
driven by the mighty force of steam. But the immediate accom- 
paniment was a degradation of labor perhaps without parallel. 
Professor Thorold Rogers (" Six Centuries of Work and Wages"), 
confirmed by many others, shows that, in the whole history of 



and a Professor of Political Economy. 



13 



England, wages were at the lowest for fifty years after the won- 
derful invention of Watt. The factory system, with child labor, 
had developed, and the most cruel distress prevailed, especially 
in all manufacturing towns. The Act of Parliament of 1842 
forbidding women to labor underground in mines "was rendered 
unavoidable by the fearful exposures made by a commission that 
had inquired into the whole subject." The Factories Act of 
1844 restrained child labor somewhat ; but the time of labor was 
not limited, and many continued to be worked twelve or more 
hours. — McCarthy, "History of Our Own Times," Vol, i.. 
Chapter xiii. 

About 1840 the steamship and railroad began to develop, and 
in succeeding years so rapidly improved and so cheapened the 
means of transport that tens of thousands of workingmen flowed 
away annually to Australia, New Zealand, South Africa, Canada, 
and the United States. What we might call a secondary effect 
of steam-power had been, as it were, to push the unoccupied land 
of these countries closer to England. 

The situation in the first half of the century might be pictured 
thus : 







V 


Great 
Tj .. • Average time required, 3 months. 


«# 

1 


(— 1 Expenses, $200. 


/ 







and in the latter half of the century, thus : 




Great Average time required, 






Britain. I month. 
□ Expenses, J50. 


•4' 

/ 





The same cause that had made wages higher, and the people in 
consequence more independent and intelligent in the United 
States and in Australia, had affected to some extent the people of 
Great Britain. That wages have risen there, in quantity, I think 
there is no doubt. That they have not risen but have declined 
as a proportion of the produce I think there is no doubt. 

In the same way, in the United States, the extension of rail- 
roads west, making accessible a vast extent of unoccupied land, 
has tended to improve wages, but, as in Great Britain, as a quan- 
tity oxi\y. For, in most industries, the productive power of labor 



14 A Correspondence between an Amateur 

has increased hand over hand. While, sixty years ago, one door 
was considered a fair day's work for one man, a planing-mill 
to-day turns out twenty-five to the hand. The amount of labor 
formerly required to make one pair of shoes or blankets, one ton 
of steel, one steam-engine, one five-room frame or brick dwelling, 
or one loaf of bread, now produces many of each. Yet the 
president of the Statistical Society, Sir Robert Giffin, seems 
elated in showing that between 1830 and 1881 wages in England 
had risen from fifty to one hundred per cent. ' His words are : 
"In all cases where I have found it possible from the apparent 
similarity of the work to make a comparison, there is an enor- 
mous apparent rise in money wages, ranging from twenty, and 
in most cases from fifty to one hundred per cent., and in one 
or two instances to more than one hundred per cent." In the 
case of the United States free trade among the States has tem- 
porarily aided the betterment. 

However, in looking broadly about the world, one observes 
that this improvement is apparent only among peoples to whom 
unoccupied land has been made accessible. There are non-emi- 
grating parts of Europe, all of Egypt, Asia Minor, India, China, 
where no betterment is perceptible. And in the case of Japan, 
good testimony warrants the belief that the introduction of steam 
and the factory system has resulted in positive evil to the working 
people. 

As shown by George, your own State has been an object lesson. 
When, in 1848, gold was discovered in the placers, the land being 
altogether unoccupied and open, wages, even of unskilled labor, 
at once rose to "an ounce" a day; and ordinary interest to 
four or five per cent, a month. Had the land been all appropri- 
ated, as here in New Jersey, it would have been "rent" that 
would have risen while wages and interest would have remained 
without change. Accompanying the enclosure of the land and 
the shutting off of opportunities has been a steady rise of " rent" 
(or land values) and decline of both wages and interest. Yet, 
when one considers how greatly the productive power of labor 
has been increased by the introduction of wealth-producing 
machines, steam-engines, railroads, and so on, as well as by the 
greater economies that come from subdivision of industry made 
possible by larger population, it is hard to believe that the aver- 
age production (per individual) is not greater now than in '49 
or '50. But — there has been a change in "distribution." 

As to the inexact use of such terms as land, capital, wealth, 
property, rent, interest, profits, and so on, I do not think that 
you differ materially from the great mass of your fellow-writers 
and teachers ; and I know of no better presentation of the results 
than that of Professor Luigi Cossa in his work, " An Introduction 
to the Study of Political Economy," where we perceive that 
the writers of each country, as if actuated by the dictum of 
Smith that " the great object of the political economy of every 
country is to increase the riches and power of that country," 



and a Professor of Political Economy. 1 5 

form, to some extent, a national school, which is, however, not 
only divided into subordinate schools, but each writer of each 
school is at variance with his fellows, and where twenty-three 
hundred authors are mentioned by name, besides further hosts 
referred to as "and others." 

Nothing perhaps better shows the increasing confusion than 
the evident inability of Cossa to recognize, among this mob, the 
very few acute thinkers ; except, it may be, his definition (one of 
the latest) of political economy. Smith's (1776) is, " The causes 
of the improvement in the productive power of labor, and the 
order according to which its produce is naturally (Italics Ama- 
teur's) distributed among the different varieties and conditions of 
men." Mill's (1848) is, " VVriters on Political Economy profess 
to teach, or to investigate, the nature of wealth, and the laws of 
its production and distribution." Favvcett's (1861) is, " Political 
Economy is concerned with those principles which regulate the 
production, the distribution, and the exchange of wealth" (Italics 
Amateur's), and then adds, " This is rather a general description 
than an accurate definition. ' ' Professor Perry (eighteenth edition, 
1883) devotes twenty-seven pages, a whole chapter, to "The 
Field of the Science." Towards the conclusion of this he says, 
" We place the field of the science just where Whately places it, 
' Catalactics or the science of exchanges;' just where the conti- 
nental Kiehl puts it, 'The doctrine of value;' and just where 
Macleod locates it, — though we do not like the term ' quantities' 
in this connection, — ' The science which treats of the laws which 
govern the relations of exchangeable quantities.' " Cossa's defi- 
nition (1893) is, " Political Economy is an ordered knowledge of 
the cause, the essence, and the rationale of the social system of 
wealth, — viz., man's concern with wealth as a social factor to be 
grasped in its essence through its causes, its rationale, and in its 
relation to prosperity at large. Not wealth, which is but a com- 
plex and shifting sum of material goods, but man's business with 
wealth, is the subject matter of political economy. This business 
it views from a special point, that of the common weal." But 
the whole chapter of five pages is really his definition, and is so 
headed. 

Running through all writers of all schools, however, there is a 
common feeling that social conditions everywhere are natural 
conditions, the outcome of unhampered human nature, which, by 
positive enactments, it will be necessary to hamper and restrain 
in order to improve. But, upon practical projects to this end, 
this common feeling "breaks up into an anarchy of opinion." 

In the midst of this babel of dogma and doctrine appears, we 
believe, the very greatest of thinkers, who has, in a book, not 
only the most important, but the most lucid and convincing ever 
given by man to man, voiced a new gospel. 

To quote from George, in his preface to the fourth edition, 
1 88 1, of " Progress and Poverty," "The great importance of this 
inquiry will be obvious. If it has been carefully and logically 



1 6 A Correspondence between an Ainatcnr and a Professor. 

pursued, its conclusions completely change the character of politi- 
cal economy, give it the coherence and certitude of a true science, 
and bring it into full sympathy with the aspirations of the masses 
of men, from whom it has long been estranged. What I have 
done in this book, if I have correctly solved the great problem I 
have sought to investigate, is to unite the truth perceived by 
the school of Smith and Ricardo to the truth perceived by the 
schools of Proudhon and La Salle, to show that laissez-faire (in 
its true, full meaning) opens the way to a realization of the noble 
dreams of socialism, to identify social law with moral law, and to 
disprove ideas which in the minds of many cloud grand and ele- 
vating perceptions." 

My whole object in first writing to you, and my whole object 
now, is to induce you, if I can, to study this writer who has 
aroused an enthusiasm such as no economist ever did, so that, 
even if not accepting his conclusions, you will be prepared intel- 
ligently to combat them. 

With respect, 

James Love. 

P. S. — I did not think that any one would deny that increase 
of population tends to increase "rent." I endeavored to point 
out that Ricardo gave but the one cause for the tendency, and 
that operating in only one way, — by lowering the "margin of 
cultivation." And that to this George adds another : " It brings 
out in land special capabilities otherwise latent," as in the sandy 
lands upon which San Francisco now stands, and this latter mode 
he is disposed to think is really the most important. Besides this, 
he reasons, and we think conclusively proves, that "rent" will 
increase, even amidst a stationary population, where improvements 
in the methods of production and exchange are going on. 



APPENDIX. 



BY T. H. BENTON DE WITT, PH.D. 

Henry George writes (" Protection or Free Trade," page 8), 
" Political economy is the simplest of the sciences. It is but the 
intellectual recognition, as related to social life, of laws which, 
in their moral aspect, men instinctively recognize, and which are 
embodied in the simple teachings of Him whom the common 
people heard gladly. ' ' 

So it may seem to the unscientific ; but to those who are 
trained, all problems of sociology, and pre-eminently the problems 
of political economy, are seen to be so involved with ever-varied 
human character and desires, that by nothing short of the slow 
and careful thought of keenest minds can the knots be loosed. 

If a simple wood-chopper, untaught in schools, whose axe, with 
which he cuts two and a half cords a day and would sell for one 
dollar, by accident is nicked, so that he could cut daily but two 
and a quarter cords, and which axe with the nick would now 
bring but ninety cents, he would not say, I shall hereafter, for an 
indefinite time, lose not only one-fourth of a cord daily, but, when 
I sell my axe, lose, in its decreased value, ten cents besides. He 
would either sell the axe for ninety cents and buy a new one for 
a dollar, or pay out ten cents to have the nick ground away. He 
would feel sure that his whole loss was this impairment of his 
capital. Not some vast sum that might, in the far future, result 
from adding to the ten cents, interest compounded annually at 
current rates, but ten cents and no more. 

Should a stock, valued at, and costing its holder, one hundred 
thousand dollars, and paying five per cent, dividends, drop its 
dividends to four and a half per cent., and the value of the stock 
in consequence permanently fall to ninety thousand dollars, the 
holder (if not an " economist") would, I am sure, debit " Profit 
and Loss" with ten thousand dollars, and in listing his assets 
thereafter count that stock at ninety thousand dollars (on which 
value the dividends would now amount to five per cent). That 
is to say, he would feel certain that he had met with one loss 
only, — /V/ es^, ten thousand dollars. 

Yet simple in appearance as these problems may be, to the 
"thinkers" in our great schools they border on the unsolvable. 
And of these "thinkers" I can present no more brilliant an ex- 
ample than that of Professor Edwin R. A. Seligman, Ph.D., of 
Columbia, especially as it is he who, in February, 189 1, in a 
letter to the Standard, of New York City, thus wafts away the fog 
in which " Wood-chopper" and " Stockholder" are involved : 

" Secondly, you take exception to my proof that the single tax 

17 



1 8 Appendix. 

would cause a double loss to existing land-owners. . . . Permit 
me to set you right. What I maintained was, that if an exclusive 
tax, of say ten per cent., were imposed on the dividends of a class 
of corporations which before the tax were paying five per cent, 
on stock quoted at par, this would leave the stockholders only 
four and a half per cent., which would reduce the price of the 
stock to ninety. The facts you accept ; the conclusion you deny. 
But your denial is founded on a complete misconception. You 
say that ' when the periodical loss is capitalized into a gross sum, 
that sum is the total loss. ' But right here you make your mis- 
take. If I had an income of five thousand dollars a year, and now, 
because of the tax, get only four thousand five hundred dollars 
a year, I lose five hundred dollars a year. If, at the end of the 
year or term of years, I sell the stock, I get only ninety thousand 
dollars, instead of one hundred thousand dollars, and therefore 
lose ten thousand dollars, — that is, I have lost not only five hun- 
dred dollars interest every year, but also ten thousand dollars 
capital, when I finally sell. The new purchaser, of course, loses 
nothing, because four thousand five hundred dollars on ninety 
thousand dollars is five per cent, on the investment, just as five 
thousand dollars is five per cent, on one hundred thousand dol- 
lars. . . . But the trouble is that the original owner paid one 
hundred and not ninety for his stock. While he owns the stock 
he gets four and a half, not five, as long as he owns it, losing in- 
terest every year, and when he sells it, loses the capitalized value 
of this decrease of interest. But, in the mean time, he has lost 
the interest also. Kindly note the distinction between the original 
holder and the new purchaser." 

" Let me say further that this doctrine of mine is by no means 
a new one. What I complain of is the ignorance of your Single 
Tax men on the Science of Finance. The doctrine presented 
above is known as 'The Capitalization Theory of Incidence,' 
or, as applied to land, is sometimes called 'The Rent-charge 
Theory.' If you desire to study it a little more in detail, per- 
mit me to refer you to a few works * on the science of finance ; 
such as Schaffle, ' Grundsatze der Stenerpolitik,' pp. 176-190; 
or Rau ' Finanzwissenschaft,' vol. ii. pp. 22-27; or Pantaleoni, 
'Traslazione del Tributi,' pp. 168-183. Here, as well as in 
countless other works, you will find the theory plainly set 
forth, "t 

The whole literature of "economics" is a denial of George's 
dictum that it is the simplest of the sciences. It will be sufficient 
however to present a single illustration from one who stands at 

* These problems evidently are far beyond the powers of any one " econo- 
mist," or even groups of economists in any one country. They call for the 
combined wisdom of the economic world. 

f It is hard to believe that even Professor Seligman can have more than 
tasted all the books referred to; but he has swallowed enough of this 
literature to be admiringly called "The Economic Cormorant." 



Appendix. 19 

the apex of authority, — Professor Alfred Marshall, of the Uni- 
versity of Cambridge, in his "Principles of Economics." He 
is dealing with the subject of "Discounting the future" in the 
gratification of desire. This requires not only pages of text 
with elaborate foot-notes, but is further clarified, and his con- 
clusions made certain by being reduced to mathematical form 
in Note i of the appendix (the simplest of thirty-five in that 
appendix). It reads, " Let h be a pleasure of which the proba- 
bility is /, and which will occur, if it all, at time /; let r be the 
rates of interest per unit which must be added to present pleasures 
before comparing them to future, and let R= i -f- r; then the 
present value of the pleasure \?>phR''. 

" If ai be the probability that an element of happiness Ah a 
person will derive from the possession of, say, a piano in the ele- 
ment of time At, then the present value of the piano to him is 

n dh 

J mJRr' 'Jldt. If we are to include all the happiness that results 

from the event at whatever distance of time we must take /= 00 . 

dh 
If the source of pleasure is in Bentham's phrase 'impure,' -r: 

will probably be negative for some values of /; and of course 
the whole value of the integral may be negative." 



The first volume of Professor Marshall's book, of seven hun- 
dred and fifty pages octavo, was published in 1890. The second 
has not yet appeared. It is understood that, taking a hint from 
Jevons,* he found the subject of "Commercial Panics" so re- 
lated to the constitution of the universe, that, for some years, he 
abandoned himself to the study of the Principia, and of the 
Mecanique Celeste. And later, finding that the laws of "dis- 
tribution" are involved in, and must be studied in the Aryan 
migrations, he has, under his friend Max Miiller, devoted three 
years to Sanscrit. 

His first volume, as may be seen from my quotation, though 
intricate, is yet comprehensible to the laity. The second, ad- 
dressed to "acute thinkers" only, will (although Marshall 
inclines to the Arabic) probably be issued in Greek. 

* Who endeavored to associate commercial panics with the periodicity of 
sun spots. 



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